October 2005

A recently released report by Ceres (self-described as a national coalition of investors, environmental organizations, and other public interest groups working with companies to address sustainability challenges such as climate change) suggests that the impacts of climate change to events such as floods, windstorms, thunderstorms, hail storms, ice storms, wildfires, droughts, and heat waves are already being felt in the United States and that their impacts will grow into the future as human activities continue to affect the atmospheric composition. However, the Ceres report derived from a paper by Mills published in Science magazine (Mills, E., 2005. Insurance in a Climate of Change. Science, 308, 1040- 1044. August 12, 2005), – fails to make its case in a scientifically defensible manner. Its analyses are inadequate and ill-formed, and it ignores a large, robust body of literature on the subject whose conclusions run opposite to those found in the Ceres report.

In this analysis, we provide a basic overview of the issue pointing out the primary scientific weaknesses underlying the conclusions in the Ceres report. In addition, we also include an extensive annotated bibliography containing summaries of major scientific reviews and findings that conclude that changes in extreme weather events are not the primary factors behind the observed increases in weather-related economic losses. This bibliography includes broad overviews, as well as papers on specific extreme weather-event types. By and large, the conclusions of these papers were not included, considered, or discussed in the Ceres report–a clear indication of the inadequacies and biases inherent in the Ceres report. Thus, the Ceres report does not fairly represent the state of knowledge on the topic of climate change and its effect on the insurance industry, and as such, should not be relied upon in decision-making processes.